One of the country’s largest electric cooperative (EC) groups on Tuesday slammed what it said was an attempt by Solar Para sa Bayan Corporation, a private solar power company to circumvent provisions of the Electric Power Industry Reform Act of 2001 (EPIRA) by obtaining a legislative franchise.
In a position paper submitted to House Appropriations Committee Chairperson Karlo Nograles, House Energy Committee Chaiperson Lord Allan Velasco, and House Legislative Franchises Committee Chairperson Franz Alvarez, Philippine Rural Electric Cooperatives Association (PHILRECA) President Presley De Jesus said electric cooperatives opposed House Bill No. 8015, otherwise known as “An Act Granting Solar Para sa Bayan Corporation a Franchise to Construct, Install, Establish, Operate, and Maintain Distributable Power Technologies and Minigrid Systems Throughout the Philippines to Improve Access to Sustainable Energy,” because the said bill grants a blanket legislative franchise to Solar Para sa Bayan to operate all throughout the country in violation of RA 9136 or the Electric Power Industry Reform Act of 2001 (EPIRA).
De Jesus added that Solar Para sa Bayan Corporation secured a legislative franchise because it had “failed to win in any bidding through a competitive selection process or CSP as mandated by the government.”
De Jesus stressed that the bill granting a franchise is unnecessary “if Solar Para sa Bayan wants to become a key player in the power sector, it could participate through the Qualified Third Party (QTP) program of the Department of Energy (DOE).”
“Solar Para Sa Bayan’s application for a national franchise is a move to do away the existing rules to participate in the electrification program of the government, particularly in the Off-Grid or SPUG Areas.”
“If Solar Para Sa Bayan is indeed interested in alleviating poverty through electrification, there is already a mechanism that will allow them to do so without the need for a national franchise,” said De Jesus.
According to De Jesus, Section 59 of the Republic Act No. 9136 readily offers a way for interested private sector/s to participate in the energization of unviable, unserved, or underserved areas that the franchised distribution utility is unable to service due to recognized constraints. The DOE, the position paper stresses, has already issued the qualification criteria for qualified third party (QTP) accreditation.
“Solar Para Sa Bayan Corporation wants to skirt and disregard QTP. Solar Para Sa Bayan’s application for a national franchise is a move to do away the existing rules to participate in the electrification program of the government, particularly in the Off-Grid or SPUG Areas,” explained De Jesus, who pointed out that Solar Philippines had previously failed to win in any bidding through a competitive selection process or CSP as mandated by the government.
The PHILRECA bucked claims that Solar Para sa Bayan Corporation will be able to offer cheaper electricity, adding that the company “has no track record as a corporation and more importantly, as an energy provider.”
De Jesus said that the solar power company had misrepresented claims that it could “offer electricity at an equal or much lower cost compared with the ERC approved rates of ECs.”
“A blanket approval for a nationwide franchise that HB 8013/8015 seek to provide Solar Para sa Bayan Corporation will encroach on the franchises of all 121 electric cooperatives.”
“The case of the Municipality of Paluan was cited as an example where Solar Para Sa Bayan confirmed before the Committee that they charge their consumers P8.00 per kWh. However, documents have surfaced to rebut this claim of cheaper rate as the company is actually charging more at P10.37 to P15.29 per kWh. We believe that such misrepresentation on the part of Solar Para Sa Bayan aimed to conceal the fact that corporation could not afford to offer lower rates.”
PHILRECA reiterated that the bill violated the EPIRA Law because neither HB 8013 nor HB 8015 nor the Solar Para sa Bayan Corporation indicate any specific area where they will be operating or providing services.
“It aims to provide the corporation a sweeping franchise to operate all throughout the Philippines. However, the Electric Power Industry Reform Act of 2001 (EPIRA) or RA 9136, franchise areas are exclusively assigned or granted to private distribution utilities, electric cooperatives, local government units presently undertaking this function, and other duly authorized distribution utilities, subject to regulation by the ERC. Therefore, a blanket approval for a nationwide franchise that HB 8013/8015 seeks to provide to the Solar Para sa Bayan Corporation will encroach on the franchises of all 121 electric cooperatives and other existing distribution facilities,” per De Jesus.
De Jesus emphasized that the 121 ECs he represented were not against renewable energy and welcomed new players in the power sector. However, he said that “there are rules to follow and policies to consider if one would like to get into the task of rural energization.”
